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Strategies & Market Trends : Options
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To: Jill who wrote (7505)5/5/2000 1:37:00 PM
From: Tom K.  Read Replies (1) of 8096
 
...I had ample margin room to move on those open positions before the brutal NAZ correction. If there's a sudden freefall, not much will protect you--even prior careful management....

If we truly play conservative with the short strategy, i.e., deal only in solid underlyings, maintain some diversification, leave plenty of cushion, keep adequate margin, and manage greed and patience, the biggest risk is owning a solid company at below market price..... that's really not so bad if you believe in the company and can revert to a CC strategy.

Last year I was short TYCO PUTs when it suddenly tanked. But it's a good company and after a few months of CC's, I came out with a nice profit and back to cash. It's also happened to me with DELL. Might also happen this month with JDSU. I'm not worried. Good companies..... don't view this as a huge risk. Maybe my rules are more conservative.

Tom
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